Kara Swisher

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Jerry Yang's Latest Missive to the Yahoo Troops: BoomTown Decodes It, So You Don't Have To!

Could we resist? No, we could not!

Since BoomTown already translated the letter from Microsoft CEO Steve Ballmer to the Yahoo board, as part of its recent effort to buy Yahoo and also Google’s blog post on the issue, we could hardly pass on this latest letter from Yahoo CEO and Co-Founder Jerry Yang to the Internet portal’s employees about its rejection of Microsoft’s $41.6 billion unsolicited offer.


Jerry wrote: Subject: our board’s decision

Translation: Why am I using all lowercase letters for all these memos? Because I am trying to regress back into childhood, where mean bullies like Steve Ballmer did not try to rough me up? Because my fancy image consultants said it would give Microsoft execs a fatal case of the giggles, thereby preventing them from pillaging Sunnyvale? Excessive and pointless cuteness, which goes hand in glove with our dumb exclamation point? And, before I forget: !!!!!

Jerry wrote: yahoos

Translation: Oh, poor beleaguered worker bees whose last nerves I am really working. But isn’t the lowercase really, really adorable?

Jerry wrote: as you’ll see from the news release we issued today, our board of directors has reviewed microsoft’s unsolicited proposal with yahoo!’s management, financial and legal advisers. after a careful evaluation, the board has unanimously concluded that the proposal is not in the best interests of yahoo! and our stockholders. of course, the board of directors is continuously evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for stockholders.

Translation: OK, we whiffed on the peanut-butter rehab. And we didn’t kill any sacred cows. And 100 days passed with nary a significant change. We’ve overseen a rapid decline in our search market share, watched as Google has cleaned our clock and Facebook has recreated our business, presided over serious dips in employee morale, delivered quarter after quarter of disappointing news to investors, driven the stock to historic lows.

But, Microsoft’s at the gates of Sunnyvale, folks! Man the cannons and heat up the boiling oil!

Unless Ballmer forks over $35 to $36 a share, then all is forgiven!

boiling oil

Jerry wrote: we believe microsoft’s proposal substantially undervalues yahoo!–including our highly recognizable global brand, large worldwide audience, significant recent investments in advertising platforms, future growth prospects, our ability to generate free cash flow and our earnings potential as well as substantial unconsolidated investments (like alibaba and yahoo! japan).

Translation: We feel pretty, oh so pretty, we feel pretty and witty and bright. OK, not so much, but we better slap some lipstick on this pig or soon we’ll be forced to serve Starbucks only in the cafeteria and be attending those Ballmer pump-you-up sessions.

Jerry wrote: you deserve the credit for the tremendously valuable business we have built. all of us in management, as well as the members of the board, deeply appreciate and respect what you have done and continue to do in order to maintain and enhance yahoo!’s leadership position in the online world.

Translation: Please, pretty please, give us one more chance. We promise we won’t crash the car into the wall again and again and again. At full speed. With our eyes closed. With you in the seatbelt-free back seat. Also, we’ll get some aspirin for that bump on your head.

Jerry wrote: we have been very deliberate about the steps we are taking to position yahoo!. we are putting in place the pieces we need to accelerate growth by becoming a leading starting point for users and the must buy for advertisers. the global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010, and our more focused strategies position us to capture an even larger share of this market. we are moving to take advantage of this unique window of time in the growth of the online advertising market to build market share and to create value for stockholders.

Translation: Maybe, if we say “starting point” and “must buy” over and over, consumers and advertisers will pay attention. And, maybe we can wrestle some of those projected ad dollars from the greedy little hands of those Googlers without the help of the nuclear warhead Ballmer is going to use. And maybe, if we wish really, really hard, Santa will bring us a business plan to accomplish all this next Christmas.

Jerry wrote: several key assets form a solid foundation as we execute this strategy.

first, our global brand is a tremendous base from which to build leadership as the starting point for internet use: yahoo! is one of the most recognizable and admired brands in the world. we have some 500 million users (1 out of every 2 internet users worldwide). in the u.s., we are #1 in personalized home pages, mail, music, news, sports, shopping and travel. yahoo! also is #1 in time spent on our sites, an increasingly important metric for marketers.

second, our substantial operating cash flow, which we expect to grow in the double digits in 2009, gives us the financial flexibility to execute our plans.

third, we have made important investments in our core computing infrastructure that provides us greater scalability and increases the rate of iteration on core technologies like algorithmic search as much as tenfold. and of course, you’re familiar with our investments in enhanced search technology through panama.

Translation: First, we are more famous than MSN, although that’s not so hard. Of course, no one Yahoos, as in a verb like they Google (damn you, Larry and Sergey) and never ever will. But our yodel is also as cute as lowercase and exclamation points and cute is our secret weapon!

Second, cash flow is a good thing as long as it keeps flowing. Good Lord, let’s pray for rain and not recession!

Third, of course, it took longer to build Panama than the real canal and now we have to keep building since everyone else has moved forward. A man, a plan, a canal, Panama! It’s a palindrome! Fun! (Try not to pay attention to the leaden stock!)


Jerry wrote: these assets—the brand, the audience, the financial strength, and the technology–position us to capitalize on this pivotal moment for yahoo! and the online marketplace. of course, our most important resource is you: the thousands of creative, passionate and committed yahoos who are executing our strategies to deliver value for users, advertisers, publishers–and stockholders.

Translation: Hey, you look great. Did you lose weight? That outfit is really flattering! (Please don’t pay attention to the anchor around the neck of our stock.)

Jerry wrote: as you know, we have taken significant steps to refocus our business on our starting point–must buy strategies. and we’re making headway.

starting points: our goal is to grow visits to key yahoo! starting points and properties, by approximately 15% per year over the next several years. and we’re on the move: we are the most visited site in the u.s., and the number of u.s. users grew strongly in the double-digits in 2007 on our yahoo.com home page alone. as our open platform takes shape it will significantly accelerate that growth.

mobile, as an area of focus, is the biggest emerging starting point in the world. with twice as many mobile users as personal computer users and projections for substantial advertising growth in mobile, we have an important competitive edge as the number one mobile destination in the u.s. and we are building a superior mobile experience for yahoo! users to further capitalize on this opportunity.

must buy: at the same time, we will increasingly make online advertising easier and more effective for marketers, opening up new ways for them to address consumers. our right media exchange, acquired last year, is more open and easy to use, simplifying transactions for buyers and sellers of online ad inventory. another 2007 acquisition, blue lithium, brings us best in class performance marketing. while we’ve historically tracked the success of our ad business by focusing on metrics related to our owned and operated sites, our goal is to increase the percentage of the total online advertising demand we touch–to 20% of our addressable market over the next several years, from an estimated 15% in 2007.

our newspaper consortium, is a great example. it has grown to more than 600 newspapers, up from just 264 just seven months ago. combined with ebay, comcast, at&t and others, we are creating a valuable, unique network of premium sites to serve our advertisers.

our key strategies will be enhanced by our adoption of platforms that welcome third party developers and encourage new applications that will enrich the user experience.

finally, beyond our core strategies, there’s the added benefit of our substantial, unconsolidated investments in china and japan: we have major positions in yahoo! japan, the leader in its market and alibaba, which is strongly positioned in china, a market with enormous growth potential.

Translation: This is the part where we really put on the dog to impress our shareholders, who could revolt at any moment; the press, which will like this likely pointless but dramatic show of corporate braggadocio; and Microsoft, which is probably not very impressed at all. So, let’s break it down, shall we?

Starting points=we’re big, so we can probably stay big for a while. It’s a miracle AOL has not fallen down dead yet, so there is lots of time for us. Let’s try to take focus off the fact that Facebook and MySpace have been growing at quantum levels in comparison and everyone is already sick of them!

Mobile=Marco Boerries is an acquired taste, but he cleans up good for presentations of cool apps we will never fully launch. Also, mobile is still a nascent ad arena, so it’s not going to matter much at all for a long time, but it is sexy. Like Marco’s cars!

Must buy=Anybody But Google. Microsoft is pushing that pitch hard in trying to buy us with advertisers and regulators and it’s a good one, so we’re going to steal it.

Newspapers=dead trees=dead end. But they are desperate and we know from desperation!

Third-party developers=Damn that Mark Zuckerberg! But, we’ll steal that idea too!

Asian investments=we made one smart decision to invest in China. OK, those dissidents being arrested was appalling and it was a PR disaster and I looked really bad in my congressional appearance. But, glass half full!

Jerry wrote: we have accomplished a great deal in a very short time. yahoo! is a faster-moving, better organized, more nimble company well on its way to transforming the experiences of its users, advertisers, publishers and developers.

i hope you are as proud as i am of the yahoo! we have built and we continue to build. thanks for your hard work.

Translation: Let’s review! Lower-case letters cute! $36 a share! More of the same ideas, but repeated over and over! Patience is a virtue!

Jerry wrote: jerry

Translation: There’s no need for name-calling yet. So please continue to call me, Jerry!

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald